PROVISION OF EXTERNAL INDEPENDENT AUDIT SERVICES FOR COMMUNITY DRIVEN MODELS FOR WASH IMPROVEMENT IN MAKULULU, KABWE

Introduction

HFHZ is requesting for proposals from eligible Independent External Audit firms with more than 5 years’ experience, for the provision of Audit services to undertake an audit of a project titled the “Community-Driven Models for WASH Improvement in Makululu, Kabwe EG 6784 project’ to verify compliance with BMZ funding guidelines. The audit firm must provide evidence of recognized qualification in Zambia (e.g., registration with Zambia Institute of Chartered Accountants or similar), confirmed by the German Embassy or competent authority.

The project was implemented by Habitat for Humanity Zambia (HFHZ) from 1st October 2022 to 30th April 2026 with funding from the Federal Republic of Germany, through BMZ in the amount of EUR 683,070.08 The audit shall cover the entire project period from 1 October 2022 to 30 April 2026, including all financial transactions and project activities within this timeframe.

Background 

Habitat for Humanity Zambia (HFHZ), affiliated to Habitat for Humanity International is a non-profit Christian organization aiming at improving housing conditions in Zambia. Their Community-Driven Models for WASH Improvement in Makululu, Kabwe EG 6784 project was implemented from 1st October 2022 to 30^th April, 2026 with funding from the Federal Republic of Germany, through BMZ. The project was implemented in accordance with all binding documents, including the project agreement, financing plan, amendments, and funding guidelines of BMZ, including BNBest-P and procurement guidelines, with objectives to improve WASH outcomes in Makululu. The audit will verify adherence to these documents and guidelines.

The project targeted 16,950 vulnerable community members residing in the Makululu informal settlement with the goal of building a resilient and healthier community through sustainable water, sanitation, and hygiene solutions by 2026. The following results were expected to be achieved:

• Improved use of clean and safely managed water.
• More people in Makululu community use improved sanitation facilities; and Improved environmental and personal hygiene practices.
• The following outputs were expected to contribute to the achievement of the above outputs:
• 11,340 Community members and 1 school have access to clean and safe water.
• 100 community members have capacity to lobby for sustainable WASH services.
• 480 community members have access to Pour Flush toilets.
• The sanitation infrastructure in the four schools in Makululu are strengthened and pupils are sensitized to adequate hygiene practices.
• 100 Community members have capacity to recycle waste for gardening and livelihood creation.
• 40,000 community members have corrected information on good hygiene practices.

Purpose and Scope of Work of the Project External Audit

The Auditor/Chartered Accountant shall have the following task:

• Confirms the project was implemented in accordance with the Project Agreement.
• Verifies that all funds were used appropriately, in compliance with BMZ funding guidelines and the approved project budget.
• Assesses whether planned project outputs and activities were delivered as intended.
• Provides a reliable audit certificate and report for the German sponsor and HFHZ, including any deviations, irregularities, or recommendations for improvement.

The Scope of Work will include:

• Review accounting records for accuracy, completeness, and compliance with IFRS/ISA.
• Examine all project-related income, expenditures, and supporting documentation. Verify all project revenues, including donor funds, interest earned on project funds, income generated through project activities, and in-kind contributions. Review the project financial report to ensure it includes all revenues and expenditures and that all entries are supported by appropriate documentation.
• Verify that funds were used solely for intended purposes and in accordance with the approved financing plan. Assess whether expenditures contributed to the achievement of project objectives and intended results.
• Identify any deviations from budgeted amounts exceeding 30% and require justification (this is based on official BMZ guidelines for funding mechanism which are higher than the threshold originally included in the project agreement).
• Verify compliance with BMZ funding guidelines (BNBest-P), procurement guidelines, project financing plan, and amendments.
• Examine personnel costs, social security contributions, contracts (employment, construction, services), and statutory obligations.
• Review cost-effectiveness of expenditures and efficient use of project equipment and resources.
• Monitor inventory, its location, and appropriate use.
• Prepare the audit report following the BMZ-prescribed template.
• Include audit findings, recommendations, and a certificate confirming inspection of books, receipts, infrastructure, and documentation.

The final audit certificate shall state the following (minimum requirement):

“We hereby confirm that we have audited the financial statement of [project executing agency] regarding the financing of the [project name] based on the following documents: project proposal, approved budget, project agreement, amendments, and supporting receipts. Our audit included verification of all revenues, expenditures, project outputs, and compliance with BMZ funding guidelines. Deviations from the financing plan exceeding 30% are explained. Findings on compliance, efficiency, and appropriateness of fund use are summarized. Key statements and audit opinion are provided in English. We have inspected physical infrastructure built during the project and reviewed documents pertaining to construction, hand-over, trainings, events, and other activities.

Based on our audit, we confirm that:

1.  All income and expenditure has been properly documented by means of receipts or vouchers.

2.  The expenditures documented have been made in accordance with the requirements of the terms of the application and the grant approval and are in accordance with the purpose outlined in the application and in the financial plan. Any deviations from the financial plan are explicitly explained.

3.  The income documented, which is entered in the accounts as the contribution made by the project-executing agency, the target group and/or other entities in the country where the project is being implemented, is correctly rendered in the accounts, with the source being explained as required.

4.  Our inspection of outputs and review of documents demonstrated that the outputs defined by the Project Agreement have (not) been delivered (with regard to the following aspects) in accordance with the Project Agreement.

5.  The donor's conditions specified in the project agreement have (not) been met (with regard to the following aspects).

6. Special remarks.”

Deliverables

• Final Audit Report
• Executive Summary, Introduction and background
• Audit objectives, scope, methodology and findings
• Auditor’s opinion on compliance, income and expenditures of the project in local currency
• Budget vs actual comparison (currency as spent). It should follow the same structure and level of detail as the approved financing plan.
• Internal Control, Compliance findings and ineligible expenditures
• Fraud, irregularities and recommendations
• Audit Certificate in English
• Any deviations exceeding 30% at both main budget line and sub-line level must be clearly explained and justified.

The audit should then provide specific findings regarding the following questions:

1.    To what extent are the revenues and expenditures properly supported by documentation?

2.    To what extent were the documented expenditures made in accordance with the application and approval, and do they correspond to the intended purpose of the application and the most recent financing plan? Are any deviations from the most recent financing plan explained in a separate statement?

3.    To what extent are the reported revenues—which are accounted for as in-kind contributions from the local project implementer, the target group, and/or other entities in the project country—accurately stated in terms of amount, and has their origin been explained in accordance with the guidelines?

4.    To what extent were the funder’s requirements listed in the project agreement followed? How were these requirements addressed? In what areas were these requirements not followed, and have reasons for non-compliance been provided?

5.    What notable positive or negative aspects of the project are there?

HFHZ will provide the following to the External Auditors:

• Project Proposal
• Project agreement, including the financing plan
• Any amendments to the financing plan
• Funding guidelines, including the BNBest-P guidelines for private organizations and the BMZ’s procurement guidelines
• Guidelines for project accounting via an external audit.
• All project-related supporting documents (regarding income, expenses, fund transfers, currency exchanges, etc.)
• All project-related contracts (employment and fee agreements, lease agreements, construction contracts, etc.)
• All project-related procurement documents, including procurement notes
• Other project-related documents requested during the external audit.

Time Frame

The whole audit process is expected to take a maximum of 30 working days that include: office work and report writing. The Final audit report to be submitted by 31^st July 2026.

Budget

The auditor’s budget should cover for all anticipated costs to conduct the whole exercise. This should include all anticipated taxes.

The budget should be itemized and easy to follow, showing any applicable taxes separately and include budget notes.

Auditor Profile and Experience

Given the nature of the task, the auditor should have skills as follows:

• Auditor must be independent from project management and funders.
• Must comply with ISA/IFRS standards.
• Provide evidence of recognized independent auditor status, confirmed by German Embassy or competent authority.
• Maximum tenure with same project: 5–6 years to avoid conflicts of interest.
• Include references of audits conducted in last 3 years.
• Price quote in ZMW, and the offer should be valid for 60 days.
• To ensure independence and prevent conflicts of interest, the engagement of the same audit firm shall not exceed 5–6 consecutive years.

Selection process and criteria:

All proposals will be evaluated systematically, based on the following key criterion. The purpose of this section is to identify suppliers with the interest, capabilities, and financial stability to supply auditing services, as defined in this ToR.

·      Quality of methodological proposal

·      Profile and competencies of audit team

·      Shortlisted firms will be contacted; others will not.

Bid Submission Requirements

All bids (Financial and Technical proposals) must:

• Be addressed to the Chairperson, Procurement Committee

• Be physically submitted in a sealed envelope

• Be accompanied by a non-returnable USB flash drive containing soft copies of all submitted documents

• Be deposited in the Tender Box at:

Habitat for Humanity Zambia

National Office Plot 488A, Twin Palms Road Kabulonga,

Lusaka Zambia

Each sealed envelope must contain only one bid and be clearly marked:

“Audit Services for BMZ1”

Submission Deadline

• Tuesday, 12th May 2026 at 10:00 AM Bid Opening

Bid Opening

• Tuesday, 12^th May 2026 at 10:30 AM Bid Opening

 • Venue: HFHZ National Office, Plot 488A, Twin Palms Road Kabulonga, Lusaka

All bids must be priced in Zambian Kwacha (ZMW) and be inclusive of all applicable taxes. All bids that will not be tax complaint will result in automatic disqualification at the bid opening stage.

Important Notice:

All bidders are strongly advised to ensure that the submission register is fully completed at the time of submission. Any bid that is incorrectly or improperly signed will result in automatic disqualification at the bid opening stage.

Habitat for Humanity Zambia reserves the right to accept or reject any bid and is not bound to accept the lowest or any bid.